Yet again my questioning of the RBA was cut short as they struggle to explain why they made such big losses as result of Covid.
It’s worth noting that Banks still have cheap money available to them under the Term Funding Facility until 2024 but have already increased interest rates to over 6%.
The taxpayer shouldn’t have to bailout the big end of town.
Economics Legislation Committee – 26/10/2023
Estimates – TREASURY PORTFOLIO
Reserve Bank of Australia
Senator RENNICK: How much of the $43 billion loss you’ve incurred over the last two years is actually realised and how much of that is market to market? Is it fair to say that this loss is the result of you subsidising the private banks for billions of dollars for cheap bonds under the Term Funding Facility?
Ms Bullock : I might have to come back to you with the specifics. A large chunk of it is unrealised losses on our bond portfolio. That’s true. For the most recent loss, there was a large chunk of that—about $4 billion—which was in fact losses because the interest we’re paying on our liabilities is greater than the interest we’re receiving on our assets.
Senator RENNICK: Yes, which is basically directly subsidising private banks.
Ms Bullock : Well, no. Basically, if you’re referring to the Term Funding Facility—and maybe Chris might have a word on this—the bottom line is that the banks pass that on, and they passed it on in very low fixed-rate housing loans to people. The people—
Senator RENNICK: Not any more they’re not. They’re passing it on at six per cent.
